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Tilray (TLRY) to Report Q1 Earnings: What's in the Cards?

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The focus will be primarily on revenue growth amid the pandemic for Tilray, Inc. TLRY when it reports first-quarter results.

In the last reported quarter, the company beat earnings expectations by 42.86%. The company has a decent track record. Tilray missed earnings estimates in two of the last four quarters and beat in the remaining two, the average negative surprise being 1.66%.

Let us see how things have shaped up prior to this announcement.

Tilray, Inc. Price, Consensus and EPS Surprise

Tilray, Inc. Price, Consensus and EPS Surprise
Tilray, Inc. Price, Consensus and EPS Surprise

Tilray, Inc. price-consensus-eps-surprise-chart | Tilray, Inc. Quote

Why a Likely Positive Surprise

Our proven model predicts an earnings beat for Tilray this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Tilray is +11.48%.

Zacks Rank: It currently carries a Zacks Rank #3.

Factors at Play

Tilray is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids.

Revenues grew 20.5% year over year in the last reported quarter to $56.6 million, driven by revenue growth across core businesses, and similar levels of growth have most likely prevailed in the quarter under review. Cannabis segment revenues increased 46%, driven by the acceleration of International Medical sales (+191%) and Canadian Adult-Use sales (+49%). Canadian medical sales grew 26%. Similar trends have likely prevailed in the first quarter.
However, Hemp segment revenue ads decreased 18% year over year due to a shift to private-label products with a large customer and the impact of COVID-related changes on consumers’ shopping patterns, a trend that has most likely continued in the to-be-reported quarter.

Total cannabis kilogram equivalents sold decreased 54%, almost entirely due to the reduction of bulk sales, and the first quarter has most likely witnessed the same.

Gross margin increased to 29% from 7% in the previous quarter and the same might have been the trend in the to-be-reported quarter.

A Key Recent Development

Tilray completed its previously announced merger with Aphria Inc. The combined company is one of the leading cannabis-focused consumer packaged goods companies with the largest global geographic footprint in the industry. Each Aphria shareholder received 0.8381 of a Tilray Share for each Aphria common share held on Apr 30, 2021. The operational efficiencies from this combination are expected to generate approximately $81 million of annual pre-tax cost-saving synergies for the company within eighteen months.

Share Price Performance

Tilray’s stock has rallied 111.6% in the year so far against the industry’s decline of 8.4%.

Other Stocks to Consider

Here are a few other stocks you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.

Ironwood Pharmaceuticals IRWD has an Earnings ESP of +0.25% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kala Pharmaceuticals, Inc. KALA has an Earnings ESP of +3.45% and a Zacks Rank #2.

Incyte INCY has an Earnings ESP of +8.48% and a Zacks Rank #3.

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